Oil futures trade slightly higher Tuesday, a day after Brent crude, the global benchmark, traded above $60 a barrel for the first time in more than a year.
The U.S. benchmark, West Texas Intermediate crude for March delivery was up 6 cents, or 0.1%, at $58.04 a barrel on the New York Mercantile Exchange. April Brent crude was up 16 cents or 0.3%, at $60.72 a barrel on ICE Futures Europe.
Oil rallied Monday as equities continued their surge,helping to lift major U.S. benchmarks to another round of all-time highs. Broad-based market optimism remains tied to expectations for another large round of government aid spending from President Joe Biden’s $1.9 trillion proposal, as well as progress on vaccine rollouts around the world.
Meanwhile, Saudi Arabia’s decision to unilaterally cut output by 1 million barrels a day in February and March is seen helping to keep supplies in check, analysts said.
COVID-19 related business restrictions are likely to remain a risk, however, until there’s a clear increase in global vaccination rates, said Warren Patterson, head of commodities strategy at ING, in a note.
Also, price levels have risen to levels that look increasingly attractive to producers, which could lead to a pickup in output that should provide some resistance to prices, Patterson said, noting that the U.S. has seen a consistent rise in the shale oil-rig count since late November.